FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

Macroeconomics

Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.

Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

<div>In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further, and for the composition of growth to evolve, reflecting four key developments.</div><ul>
<li>Slower growth of the working age population (which is largely baked in).</li>
<li>Urbanisation to continue albeit at a more gradual pace.</li>
<li>The still large productivity gap between China and advanced economies to narrow further, the speed of which is subject to the implementation of…</li>
</ul>

In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further, and for the composition of growth to evolve, reflecting four key developments.
Slower growth of the working age population (which is largely baked in).
Urbanisation to continue albeit at a more gradual pace.
The still large productivity gap between China and advanced economies to narrow further, the speed of which is subject to the implementation of…


Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Equity Bottom-Up

<ul><li>Like many global steelmakers, BlueScope has struggled since the global financial crisis.</li><li>The company avoided diversifying into mining via top-of-the-cycle acquisitions, but BlueScope still faces stiff headwinds.</li><li>Debt-fueled acquisitions leading into the global financial crisis forced equity raisings, increasing the number of shares on issue more than four times, and some asset sales.</li><li>With the balance sheet repaired in 2013, the company is on a much firmer financial footing.</li><li>However, BlueScope lacks meaningful cost advantage and we don't believe the company's painted and coated steel, and pre-engineered building brands are moat worthy.</li><li>While improvement is likely from the horrendous 2009 to 2013 base, this already appears priced in. Competitive pressures in steelmaking mean BlueScope is unlikely to earn its cost of capital long term.</li></ul>Analysts: Mathew Hodge &amp; Mark TaylorFull report below the fold....

Like many global steelmakers, BlueScope has struggled since the global financial crisis.The company avoided diversifying into mining via top-of-the-cycle acquisitions, but BlueScope still faces stiff headwinds.Debt-fueled acquisitions leading into the global financial crisis forced equity raisings, increasing the number of shares on issue more than four times, and some asset sales.With the balance sheet repaired in 2013, the company is on a much firmer financial footing.However, BlueScope lacks meaningful cost advantage and we don't believe the company's painted and coated steel, and pre-engineered building brands are moat worthy.While improvement is likely from the horrendous 2009 to 2013 base, this already appears priced in. Competitive pressures in steelmaking mean BlueScope is unlikely to earn its cost of capital long term.Analysts: Mathew Hodge &amp; Mark TaylorFull report below the fold....

With the balance sheet repaired, BlueScope is stabilised, but significant optimism is priced in.

The market is firmly expecting another rate cut from the RBA at today&rsquo;s Board meeting. The domestic data flow has not delivered any large negative surprises, but the key swing factor over the past month appears to have been the 25% slide in the iron ore price, reflecting lower steel demand associated with renewed weakness in Chinese housing markets but also a lift in expected future iron ore production. Importantly, short-term gyrations in volatile commodity markets are unlikely to sway the RBA, nor does the the slide in the iron ore price provide a positive narrative to ease monetary policy. The RBA has plenty of scope to cut interest rates: the economy remains stuck in a nominal recession, revenue conditions are subdued, there is still considerable slack in the labour market, growth in private sector wages has reached a record low and the inflation outlook does not pose an obstacle to another rate cut.&nbsp;&nbsp; But the central bank will likely wait for another month.

The market is firmly expecting another rate cut from the RBA at today&rsquo;s Board meeting. The domestic data flow has not delivered any large negative surprises, but the key swing factor over the past month appears to have been the 25% slide in the iron ore price, reflecting lower steel demand associated with renewed weakness in Chinese housing markets but also a lift in expected future iron ore production. Importantly, short-term gyrations in volatile commodity markets are unlikely to sway the RBA, nor does the the slide in the iron ore price provide a positive narrative to ease monetary policy. The RBA has plenty of scope to cut interest rates: the economy remains stuck in a nominal recession, revenue conditions are subdued, there is still considerable slack in the labour market, growth in private sector wages has reached a record low and the inflation outlook does not pose an obstacle to another rate cut.&nbsp;&nbsp; But the central bank will likely wait for another month.

Another line ball decision for the RBA, but expect no change in April

The March non-farm payrolls release confirmed that employment in the United States continues to expand but at a more moderate pace over the past three months.&nbsp;The Phillips curve has flattened since the financial crisis, which confirms that inflation has become less responsive to changes in the unemployment rate. A structurally lower participation rate associated with the demographics of ageing suggests that there is far more slack in the labour market than implied by the unemployment rate of 5.5%.&nbsp; The performance of premium rated growth stocks around the taper &lsquo;tantrum&rsquo; in May 2013 reveals just how sensitive these stocks are to the future course of US monetary policy. The worst four performing stocks among the ASX200 at the time were: CTD, DMP, IIN and REA, reflecting their long duration attributes. Discount rate shocks therefore represent a key risk for growth investors. But the recent moderation&nbsp;of US&nbsp;employment growth, still considerable slack in the US labour market, and little prospect that core inflation will move back to the Fed Reserve's 2% objective anytime soon, should buy more time for not just the Fed but also growth investors.

The March non-farm payrolls release confirmed that employment in the United States continues to expand but at a more moderate pace over the past three months.&nbsp;The Phillips curve has flattened since the financial crisis, which confirms that inflation has become less responsive to changes in the unemployment rate. A structurally lower participation rate associated with the demographics of ageing suggests that there is far more slack in the labour market than implied by the unemployment rate of 5.5%.&nbsp; The performance of premium rated growth stocks around the taper &lsquo;tantrum&rsquo; in May 2013 reveals just how sensitive these stocks are to the future course of US monetary policy. The worst four performing stocks among the ASX200 at the time were: CTD, DMP, IIN and REA, reflecting their long duration attributes. Discount rate shocks therefore represent a key risk for growth investors. But the recent moderation&nbsp;of US&nbsp;employment growth, still considerable slack in the US labour market, and little prospect that core inflation will move back to the Fed Reserve's 2% objective anytime soon, should buy more time for not just the Fed but also growth investors.

US employment growth moderates, buying the Fed and growth investors more time

Australia

BlueScope Steel Limited supplies steel products and solutions. The Company manufactures steel slabs, plates, hot and cold rolled coils, and coated and painted strip products for building and construction, automotive, whitegoods, and manufacturing applications. BlueScope Steel serves customers in Asia, Australia, New Zealand, and the United States.

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Bluescope Steel (BSL AU)

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Domestic Australian factors are being overshadowed by global developments. These global drivers account for both its rapid rebound over the last...

Greg Gibbs

RBA Downbeat on Commodity Price Outlook

In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further,...

Sam Ferraro

With the balance sheet repaired, BlueScope is stabilised, but significant optimism is priced in.

Like many global steelmakers, BlueScope has struggled since the global financial crisis. The company avoided diversifying into mining via...

Morningstar, Inc.

Another line ball decision for the RBA, but expect no change in April

The market is firmly expecting another rate cut from the RBA at today’s Board meeting. The domestic data flow has not delivered any large negative...

Sam Ferraro

US employment growth moderates, buying the Fed and growth investors more time

The March non-farm payrolls release confirmed that employment in the United States continues to expand but at a more moderate pace over the past...

Sam Ferraro

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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